Hashflow (HFT)

Hashflow is a decentralized exchange designed for interoperability, zero slippage, and MEV-protected trades.

Basics

• Based in:
• Founded in 2020
• Announced on: 29-4-2021
• Testnet release:
• Mainnet release:
• From EthHub (4-5-2021):

"Hashflow is a decentralized exchange that lets users trade trustlessly with crypto’s top market makers. It allows for better prices, no slippage, and rock-bottom gas fees."

History

• From a commissioned Messari report (22-3-2023):

"Hashflow was founded in 2020 by Varun Kumar, Victor Ionescu, and Vinod Raghavan. After launching in Private Alpha in April 2021, Hashflow fully launched last August. Since initially launching on Ethereum, it expanded to Arbitrum, Avalanche, BNB, Polygon, and Optimism in early 2022."

Audits & Exploits

• Bug bounty program can be found [insert here].
• The protocol has passed three audits (22-3-2023).

Governance

Admin Keys

• From a commissioned Messari report (22-3-2023):

"An audit by Certik identified Hashflow’s major risk vector to be centralization, with a key contract currently managed by the core team around permissioning pools. The permissions include enabling new pools and market makers as well as limiting existing ones. The team is working on updating the contracts to include an immutable and more limited permissions contract."

DAO

• From a commissioned Messari report (21-4-2023):

"The Hashflow Foundation is in the process of decentralizing the protocol. It uses token voting for off-chain governance, with an optional vote escrow staking mechanism for holders to increase their voting power depending on the length of the escrow."

Treasury

• The community treasury will be the sole recipient of HFT’s perpetual 4% inflation, which starts in November 2026.

Token

Launch

• In November 2022, Hashflow launched HFT, its Ethereum-based ERC-20 governance token.

Token Allocation

• From a commissioned Messari report (22-3-2023):

"At the token generation event (TGE), ~17.5% of the total supply (175 million HFT) was unlocked and distributed to various community members (NFT holders), users (traders, market makers, and liquidity providers), and external contributors outside of the “Ecosystem Development” allocation. Beyond that, ~19.3% of HFT of the total supply was allocated to the Hashflow team, with an additional 2.5% for future hires. These tokens have a 1-year cliff and a subsequent 3-5 year vesting period. Investors received 25% of total HFT supply with a 1-year cliff and 3-year vesting period.

The largest allocation from the initial supply is for “Ecosystem Development.” As such,~53.2% of total HFT supply is set to go to ecosystem partners, community members, the community treasury, and other external stakeholders. Different stakeholders have different vesting schedules, with over one-third of Ecosystem Development HFT already unlocked."

Utility

• Tokenholders voted to turn on fees for traders, and the team is working on an implementation that splits a portion of execution savings between users and the protocol (31-1-2024).

Technology

• Whitepaper can be found [insert here].
• Hashflow’s codebase is closed source, and its smart contract addresses are not public (3-2023).

Implementations

• Built on: Initially launching on Ethereum, it expanded to Arbitrum, Avalanche, BNB, Polygon, and Optimism in early 2022

How it works

• From a commissioned Messari report (22-3-2023):

"Hashflow is a new type of DEX where traders can know the price of a trade before executing it. It offers traders prices through a request-for-quote model (RFQ) with professional market makers, instead of a bonding curve. The implementation uses signature-based pricing, allowing market makers to do pricing computation off-chain. This approach addresses shortcomings that are prevalent in AMMs, offering MEV-resistance, no slippage, and access to cross-chain liquidity.

Traders can permissionlessly interact with the Hashflow protocol and request a quote to trade any listed asset (i.e., to buy ETH for 1,000 USDC). Hashflow relays the RFQ to MMs, who do off-chain computation to determine their best bid or offer. After the MMs respond with their prices, the Hashflow protocol finds the best price and shows it to the trader.

Traders can then agree to trade at that price or choose to hold off. If the trader agrees to the price within the time window, the assets are swapped between the trader and MM liquidity pool. Up until then, the trader has custody of their assets at all times. Because the MM prices assets off-chain and cryptographically signs the quote, there is no front-running opportunity for MEV bots.

Currently, the Hashflow core team does due diligence on market makers and is responsible for giving them access. The Hashflow Foundation also requires know your customer (KYC) procedures and binding legal contracts. The long-term objective is to create permissionless access to becoming a market maker."

Fees

• From a commissioned Messari report (22-3-2023):

"For the foreseeable future, there are no trading fees, but the DAO is able to turn on fees down the road."

Staking

• From a commissioned Messari report (21-4-2023):

"Less than 20% of HFT Holders are staking. Of the nearly 2,000 stakers, 42% of them are staking for over two years (the maximum is 4 years). They are also earning voting power, HFT rewards (targeting 10% APY), and a higher power level in the Hashverse, which can increase future HFT earnings.

There are also many shorter-term lockers, which could lead to potential changes in HFT liquidity. At quarter end, there was 1.3 million HFT coming out of vote escrow locking in the second quarter. In total, 6.2 million HFT, or 3.6% of circulating supply, is locked as veHFT."

Validator Stats

• From a commissioned Messari report (31-10-2023):

"The number of HFT stakers increased, but the amount of staked HFT fell over 30% in the quarter as a single large lockup ended."

Oracle Method

• Pyth is mentioned as oracle (7-3-2022).

Their Other Projects

Hashverse

• From a commissioned Messari report (22-3-2023):

"The Hashverse is Hashflow’s soon-to-be-launched gamified user introduction platform. The design is meant to expand the holder base of HFT and help new users take advantage of the protocol’s features. Aside from growing the community, the Hashverse should also help increase trading activity on Hashflow.

HFT holders can lock tokens to create an in-game character. They will then be able to complete tasks and quests to earn additional HFT and further increase their voting power. The experience is intended to strengthen the community while creating opportunities for users to contribute and earn HFT."

Roadmap

• Can be found here (2023).
• From a commissioned Messari report (22-3-2023):

"H1’23 will bring improvements for users like smart order routing, a fiat on-ramp, and Hashflow’s first non-EVM deployment. The planned upgrades for the second half of 2023 include limit orders, time-weighted average price (TWAP) trading, and an order book."

Usage

• From a commissioned Messari report (22-3-2023):

"Hashflow has been incentivizing activity (market making, liquidity provision, and trading) on the platform. Since its launch in August 2021, Hashflow has had a cumulative $12.3 billion traded through its platform. Ethereum has the lion’s share of volume, hovering around 50%, with BNB Chain (25%), Arbitrum (13%), and Avalanche (5%) capturing most of the remaining volume. Since their April 2022 launch, cross-chain swaps have accounted for roughly 0.4% of total volume."

Projects that use or built on it

• From a commissioned Messari report (22-3-2023):

"In addition to its core user interface, Hashflow has attracted volume through integrations with projects like DEX aggregator 1inch, DefiLlama, Odos, OpenOcean, OKX, and smart wallet Zerion."

Pros and Cons

Cons

• Had investment from Alameda Research/FTX, which came out (11-11-2022) during the FTX crash. This could mean fall-out risk.

Team, Funding, Partners

Team

• Full team can be found [here].
• From a commissioned Messari report (22-3-2023):

"Hashflow was founded in 2020 by Varun Kumar, Victor Ionescu, and Vinod Raghavan"

Funding

• From a commissioned Messari report (22-3-2023):

"Hashflow announced a $3.2 million seed round led by Dragonfly Capital and Electric Capital. In July 2022, Hashflow raised a $25 million Series A at a $400 million valuation. In addition to follow-on investments from Electric Capital and Dragonfly Capital, the Series A designated a number of prominent market makers as Hashflow stakeholders, including Jump Crypto, Wintermute, LedgerPrime, Altonomy, and GSR. Other prominent investors include Galaxy Digital, Coinbase, Balaji Srinivasan, and Jason Choi."

Partners

• From a commissioned Messari report (21-4-2023):

"Partnered with Magic Eden to launch their "Enter the Hashverse Season 1 Battle Pack," a special offering that allows users to participate in a tournament-style event with prizes. When the battle packs minted on Ethereum on April 6, Hashflow became Magic Eden’s first partner on Ethereum."

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